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Federal Court Holds a Constable Qualifies as a ‘Debt Collector’ Under FDCPA and a ‘Creditor’ Under Massachusetts Law

fdcpaThe U.S. District Court for the District of Massachusetts recently denied a motion to dismiss FDCPA and Mass. Gen. Law. Ch. 93 and 93A claims, holding that a constable qualifies as a “debt collector” under the Fair Debt Collection Practices Act and a “creditor” under Mass. Gen. Laws ch. 93.

A copy of the opinion in Espinosa v. Metcalf is available at: Link to Opinion.

The plaintiffs, Sergio Espinosa, Sr. (“Senior”) and Sergio Espinosa, Jr. (“Junior”), filed suit against Andrew C. Metcalf, Judgment Acquisitions Unlimited (“JAU”), Champion Funding, Inc., Export Enterprises Inc., Massachusetts Constable Inc. d/b/a Massachusetts Constables Office (“MCO”) and Brian Abelli alleging, amongst other things, violations of the Fair Debt Collection Practices Act and Mass. Gen. Laws ch. 93 and 93A arising from an attempted debt collection.

Under Massachusetts law constables are either elected or appointed to serve a specific municipality. Within their designated area, they can serve process and even make arrests. Here, the constables, MCO and Abelli, filed a motion to dismiss the claims asserted against them.

Champion obtained a judgment in 2006 from Senior relating to a credit card debt. His son, Junior was a minor at the time and had no connection to the debt. Several years later, Champion hired Metcalf and JAU to collect the judgment. Metcalf and JAU subsequently hired MCO and Abelli to seize vehicles belonging to Senior and Junior.

At approximately 3:30 a.m. on Sept. 22, 2020, Senior and Junior awoke to a truck in their driveway trying to tow Junior’s vehicle. Abelli or another uniformed constable at MCO oversaw the seizure. Junior advised that he was the sole owner of the vehicle and presented registration demonstrating the same. The defendants claimed they had a right to seize the vehicle and drove off with it.

The next day Junior contacted JAU and spoke with Metcalf, advising him they had no right to take his vehicle. Metcalf allegedly responded, “you are lying,” “I deal with liars every day” and that the vehicle was in fact registered to Senior. The vehicle was in fact registered to Junior, not Senior, who leased a Honda Accord through Honda Financial.

Even after being advised they seized the wrong vehicle, JAU and Metcalf told Junior they would “settle” for $4,000. Champion, Metcalf, JAU and Export refused to return Junior’s vehicle for 16 days. When they finally returned the vehicle, they immediately seized Senior’s leased Honda. Senior and Honda Financial repeatedly advised the defendants they could not legally seize the Honda since Senior did not own it and provided a copy of the lease. The defendants refused to return Senior’s vehicle unless he paid thousands of dollars in storage fees.

MCO and Abelli argued the plaintiffs’ FDCPA claims should be dismissed because they are excluded from the definition of “debt collector,” relying on Section 1692a(6)(D), which excludes “any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt.” According to MCO and Abelli, they fell under the “legal process” exclusion because, at all relevant times, they acted “in connection with the judicial enforcement of the debt as ordered by the [e]xecution granted to [Champion] in 2006.”

The Court held the exclusion did not apply because the complaint does not allege that MCO or Abelli attempted to serve process to plaintiffs. Further, to the extent the complaint alleges MCO and Abelli attempted to collect the 2006 judgment, such would disqualify them from the legal process server exclusion because “a person who goes beyond being merely a messenger in serving legal process and engages in prohibited abusive or harassing activities to force an individual to repay a debt is no longer exempt under the legal process server exception” because “he steps beyond the bounds of the official duties inherent in serving process and takes on a secondary role of ‘debt collector.’” Andrews v. S. Coast Legal Servs., Inc., 582 F. Supp. 2d 82, 88 (D. Mass. 2008).

Concluding that MCO and Abelli plausibly constitute “debt collectors,” the Court next held that the complaint sufficiently pleaded violations of Sections 1692d and 1692e of the FDCPA. Section 1692d provides that a “debt collector may not engage in any conduct the natural consequences of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” 15 U.S.C. §. 1692d.

Despite being informed that the vehicle belonged to Junior, defendants nevertheless insisted they were taking it. The defendants also advised Export to continue charging storage fees in connection with the illegal seizures of Junior’s and Senior’s vehicles. The Court held that such knowing misconduct plausibly qualifies as harassing, oppressing or abusive behavior under Section 1692d.

Section 1692e prohibits debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. §. 1692e. The Court held the defendants’ threats to sell Senior’s leased vehicle even after learning he did not own it to induce him to pay thousands of dollars of storage fees established a reasonable inference that the defendants were liable for violating Section 1692e as to Senior. Similarly, the defendants’ claim they had the right to seize Junior’s vehicle even after being advised that he was the sole owner plausibly constituted a false, deceptive or misleading representation.

Regarding the plaintiffs’ claims for violation of Mass. Gen Laws ch. 93 and 93A, the Court noted that the Attorney General’s debt collection regulations defined a “creditor” as “any person and his or her agents, servants, employees, or attorneys engaged in collecting a debt owed or alleged to be owed to him or her by a debtor and shall also include a buyer of delinquent debt who hires a third party or an attorney to collect such debt[,]” but not “if his or her activities are solely for the purpose of serving legal process on another person in connection with the judicial enforcement of a debt.” 940 C.M.R. § 7.03.

For the reasons already discussed, the Court held the defendants did not fall under the exception for “person[s]” whose “activities are solely for the purpose of serving legal process.” Further, the Massachusetts definition of “creditor” also includes “agents” and “servants” of creditors, which encompasses MCO and Abelli acting on behalf of Champion, Metcalf and JAU.

Finally, the defendants argued that, even if they constitute “creditors” under the Attorney General’s debt collection regulations, the plaintiffs’ claim should be dismissed because the complaint fails to allege sufficient facts to suggest a violation of such regulations. The Court rejected their argument for virtually the same reasons it rejected their attempt to dismiss the plaintiffs’ FDCPA claims, holding that the complaint adequately pleaded various violations of 940 C.M.R. § 7.07.

Accordingly, the Court denied the defendants’ motion to dismiss.

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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